J.M. Smucker Co.'s (SJM) fiscal first-quarter earnings rose 14%
as the food maker's volume improved and margins grew amid lower
costs.
The company revised its full-year guidance, now predicting $5.72
to $5.82 a share in adjusted earnings and revenue to decline about
1% from the year earlier. It previously forecast adjusted per-share
earnings of $5.65 to $5.75 on revenue comparable to the $5.9
billion from a year earlier.
Separately, Smucker said it acquired Enray Inc. The
privately-held company based in California manufactures organic,
gluten-free ancient grain products, including pastas and cookies,
mostly sold under its flagship brand truRoots. Details of the
acquisition weren't disclosed, but Smucker said Enray's net sales
were $45 million over the latest 12 months.
"This acquisition strengthens and adds to the breadth of our
natural foods business, extending it beyond the leadership position
we currently hold in the natural and organic beverages category,"
said Chief Executive Richard Smucker.
Smucker, known for its Smucker's fruit spreads and Jif peanut
butter, brings in much of its revenue from its U.S. coffee
business, which includes brands such as Folgers and Dunkin"
Donuts.
Smucker executives have expressed some confidence that the
consumer remains on the mend. They have projected sales volume for
its key retail business to remain up over the next year, with
momentum from the fourth quarter carrying over, a positive sign as
the packaged food industry has had a hard time selling more of its
products lately.
Smucker reported overall volume for the quarter increased about
1% driven by increases of 4% in both the U.S. retail coffee and
U.S. retail consumer foods segments.
For the quarter ended July 31, Smucker reported a profit of
$126.6 million, or $1.19 a share, up from $110.9 million, or $1 a
share, a year earlier. Excluding items such as restructuring costs,
earnings were up at $1.24 from $1.17.
Sales shrank 1.4% to $1.35 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of $1.20 on revenue of $1.34 billion.
Gross margin widened to 36.5% from 34.3% as input costs fell
4.4%.
U.S. retail coffee sales fell 1.2% and the segment's profit grew
16%. Smucker said the year-earlier period was hurt by the timing of
price declines.
Sales of U.S. retail consumer foods were up 1.5% and profit fell
11%. The international, foodservice and natural foods segment
posted 6.4% lower sales amid lower volume, though lower raw
material costs helped income rise 6.6%.
Shares closed Tuesday at $109.10 and were inactive premarket.
The stock has risen 27% since the start of the year.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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